But while Governor Bush is keeping coyly quiet about the details of his new "compassionate conservative" philosophy, Mayor Goldsmith - one of Mr. Bush's top domestic-policy advisers - is happy to talk.

In fact, Goldsmith - and the small Midwestern metropolis he runs - have now taken on national significance. What's worked here will surely shape the Bush campaign. And if Bush wins, what's worked in Indianapolis could be coming to a town near you.

Goldsmith is a curious blend of business-savvy conservative and socially conscious politician. In fact, his take on policy seems to be a kind of Republican version of President Clinton's third-way strategy - firmly rooted in the conservative tradition, but with many liberal twists.

"Government can really mess things up," he says, sitting in his 25th-floor conference room, looking out on the fast-growing skyline of America's 12th largest city.

But then, talking about crime and prisons, he says, "I'd rather cut everybody's prison sentence by 10 percent and extend the rigor of their post-release monitoring so they stay off drugs." Not the words of a traditional lock-'em-up conservative.

Goldsmith is known as Mr. Public-Private Partnership. It's a wonkish term. And Goldsmith is definitely an idea-driven policy wonk, requiring his staff to read things like Reason magazine and articles by management guru Peter Drucker.

But his wonkish ways have helped bring a flurry of unique ideas to this city.

There are the privately run city airport and jail, for instance. And the fact that, with the city's help, the local archdiocese is building the first Roman Catholic elementary school to be constructed in any American inner city since the 1950s. Not to mention that during Goldsmith's seven years as mayor, the city has cut property taxes four times and trimmed its budget $41 million.

Privatization is one of Goldsmith's mantras. Today, the city's car-towing operations, golf courses, sewer-bill collections, and document copying, to name a few, are all run by private companies.

He argues that, too often, governments assume the way to solve a problem is to boost spending: Trash collection falling behind? Boost the trash department's budget.

But Goldsmith says that approach leads to waste. When his business-minded team prowled around the public works department, for instance, they found it had spent $252,000 over four years fixing a garbage truck that was worth only $90,000. City taxpayers were spending $39 per mile to operate this one truck.

Instead, he says, governments must look at lowering the cost of providing services - in this case buying a new trash truck to increase efficiency.

So, how would this approach work on a national level? "Let me tell you about the Defense Department," he says, smiling and straightening up.

He's actually already working with top defense officials to streamline the department. The problem, he says, is that 10 years ago there were an equal number of troops and military bureaucrats. But after several rounds of troop downsizing, the ratio is now 30 percent troops to 70 percent bureaucrats.

That's got to change, he says. And real change can come only through privatization.

"You can't reinvent government without external competitive pressures," he says. "The bureaucracy is just too resilient."

Likewise, in the social-welfare realm, he sees a big role for private groups - in this case nonprofits, many of which are church-based. He envisions boosting spending to help these groups connect the jobless with employers. "The government bureaucracy just isn't able to do that." But often, church-based groups can.

Indeed, Goldsmith sees a big role for the church in education, too.

One of his most innovative and lesser-known initiatives is his work with Roman Catholic schools. After trying unsuccessfully to gain control of - and revamp - the city's public schools, he has focused instead on parochial schools.

"They've become the schools of choice in the inner city," he says, noting their long waiting lists.

In the first effort of its kind in the United States, Goldsmith helped pass a $40 million bond offering for the local archdiocese, which is now building two new schools.

At the Holy Angels school in a poverty-laced neighborhood on the city's north side, the principal, Sister Gerry O'Loughlin, calls the new building "a miracle."

"We're actually going to have doors on our classrooms - and walls between them," she says looking out over the bustling construction site from the school's crowded and decaying current building.

As in many areas, Goldsmith says this kind of public-private partnership makes sense on a national level too. "Absent parochial schools flourishing we'd be banishing tens of thousands of kids to poverty."